FMC fines NYK and K-Line

The FMC has fined  K-Line and NYK.  The press release says they violated 46 U.S.C.  41102 listed below.

My best guess is they were buying space from each other without having a space agreement on file at the FMC, and they were not charging each other as per the tariff.   

I recall carriers doing this, thinking there was nothing wrong.  It didn't use to be difficult to file these type of agreements (perhaps it is now).  Not knowing, or caring, about U.S. law cost each of these carriers over 1 USD million a piece.

Maybe that's not much money to them.

click here for press release (also quoted below)

Here's the section of the law they violated.

§41102. General prohibitions

(a) Obtaining Transportation at Less Than Applicable Rates.—A person may not knowingly and willfully, directly or indirectly, by means of false billing, false classification, false weighing, false report of weight, false measurement, or any other unjust or unfair device or means, obtain or attempt to obtain ocean transportation for property at less than the rates or charges that would otherwise apply.

(b) Operating Contrary to Agreement.—A person may not operate under an agreement required to be filed under section 40302 or 40305 of this title if—

(1) the agreement has not become effective under section 40304 of this title or has been rejected, disapproved, or canceled; or

(2) the operation is not in accordance with the terms of the agreement or any modifications to the agreement made by the Federal Maritime Commission.

(c) Practices in Handling Property.—A common carrier, marine terminal operator, or ocean transportation intermediary may not fail to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property.

And here's the press release from the FMC

December 23, 2013

NR 13-19

Contact: Karen V. Gregory, Secretary (202) 523-5725
The Federal Maritime Commission announced compromise agreements reached with two common carriers operating pure car carriers (PCCs) and roll on/roll off (RO/RO) vessels in U.S. inbound and outbound trades. Under these separate agreements, Kawasaki Kisen Kaisha Ltd. (K Line), paid $1,100,000 in civil penalties and Nippon Yusen Kaisha (NYK Line), paid $1,225,000 in penalties. Both carriers are headquartered in Tokyo, Japan, and operate diverse fleets trading in the U.S.-foreign trades and globally.
The compromise agreements resolved allegations that K Line and NYK Line violated provisions of the Shipping Act, including section 10(a) of the Shipping Act, 46 U.S.C. § 41102(b), by acting in concert with other ocean common carriers with respect to the shipment of automobiles and other motorized vehicles by RO/RO or specialized car carrier vessels, where such agreement(s) had not been filed with the Commission or become effective under the Shipping Act. The compromise agreements also addressed related activities and violations. Commission staff alleged that these practices persisted over a period of several years and involved numerous U.S. trade lanes, including from and/or to the Far East, Europe, the Middle East and South America.
Chairman Mario Cordero stated: "These penalties underscore the seriousness with which the Commission views the carriers’ obligation to file with the Commission any agreement with other carriers affecting working relationships in the U.S. trades, both for import and export traffic. The shipping public has a right to know the subject matter and scope of any such agreement, and the Commission is charged by Congress to oversee the parties’ operations and conduct under such agreements. Investigations by our Bureau of Enforcement as to additional carriers implicated in similar agreement activities are continuing at this time."
In concluding the compromise agreements, K Line and NYK Line agreed to provide ongoing cooperation with other Commission investigations or enforcement actions with respect to these types of activities. The carriers did not admit to violations of the Act or the Commission’s regulations. Staff attorneys with the Commission’s Bureau of Enforcement negotiated the compromise agreements.
The Federal Maritime Commission (FMC) is the independent federal agency responsible for regulating the nation’s international ocean transportation for the benefit of exporters, importers, and the American consumer. The FMC’s mission is to foster a fair, efficient, and reliable international ocean transportation system while protecting the public from unfair and deceptive practices.